Standard Life Aberdeen sells insurance arm to Phoenix in £3bn deal

Merge-Mergers-700.jpgStandard Life Aberdeen has sold its insurance arm to Phoenix in a £3bn deal.

In the first results since the merger of Standard Life and Aberdeen Asset Management, the firm has said it has decided to exit the insurance market.

Phoenix will pay a total of £2bn in cash for the business. Standard Life Aberdeen will then take a 19.9 per cent shareholding in Phoenix, increasing the total value of the deal to £3.2bn.

Aberdeen Standard Investments currently manages around £48bn on behalf of Phoenix in a partnership deal that has also been extended today.

Co-chief executives Martin Gilbert and Keith Skeoch said that the deal was the “logical next step” in transitioning the firm into a “world class investment company.”

Standard Life Abderdeen says in a statement: “While the long-term savings market in the UK is supported by attractive structural growth trends, the board believes that Standard Life Aberdeen can best capture the benefits of these growth dynamics through Aberdeen Standard Investments and its retail platforms. In partnering with Phoenix Group, whose expertise is in administering and servicing long-term savings, Standard Life Aberdeen is able to realise attractive value for the disposed businesses, while continuing to benefit from access to related assets and flows.”

Earlier this month, Standard Life Aberdeen suffered a blow as Scottish Widows parent Lloyds Banking Group withdrew £109bn in mandates from the firm, citing competition concerns over the newly merged brand.

Scottish Widows said it could reconsider the mandates if Standard Life Aberdeen made changes to ensure it was not competing in Scottish Widows’ core areas.

The deal with Phoenix is “subject to adjustment in certain circumstances, including if assets or mandates associated with the Phoenix Group…are withdrawn”.

The firm said it remains committed to running all three of its adviser platforms, Standard Life Wrap, Elevate and Parmenion, separately, as to continuing to grow national advice business 1825.

It added that owning advice business and platforms allowed the investment manager to have “greater proximity” to retail customers.

Change at the top

Meanwhile, Standard Life Aberdeen has also announced a number of board changes today. Gerry Grimstone, former Standard Life chairman and chairman of the newly merged company, will stand down by the end of 2019.

Julie Chakraverty, Lynne Peacock and Akira Suzuki will also retire from the board after its next annual general meeting.

This will leave the Standard Life Aberdeen board with two women and eleven men.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. From an exceptionally run insurance company 10 years ago with everything going for it, to a now failing “wealth management” company struggling for its very existence. Let this be a salutatory lesson to those companys’ thinking of going down this route.
    As for the poor clients being shifted to Phoenix, I wish Phoenix all the luck in the world trying to stem the outflows over the next few years.

  2. High time the regulator focussed on these companies who sit on vast amounts of funds in old pension/investment contracts, taken over from companies who have left the market and with no real intent to do much in terms of client advice other than collect the annual legacy fees and send out annual updates …. people are quick enough to jump on the adviser community for supposedly the same reasons!

  3. Sounds to me a very large case of incestuous obfuscation to me, We need to get rid of these “Names” used to mislead the public, LLoyds/Bir-Mids/Halfax/Scot/Widows ect Why are they not just called the LLoyds Group. as we had Barclays/Woolwich, now with Standard Life Aberdeen, who are we kidding, it is basically an abuse of the historic charges levied on out of date contracts. How on earth is the FCA able to regulate these dinosaur’s of the Industry.

  4. Phoenix – an absolute disgrace to financial services. They are immune from regulatory censure by having Tiner as the big banana. This is a firm noted for maintaining the highest charges possible on old plans and not providing anything like a service.
    Add this to the further huge withdrawals from GARS, the Llloyds saga and their stupid boast that they have received large amounts into their platform from DB schemes. Something that could well bite them in the bum in the future.
    Is this indeed a firm going down the toilet? How long before they are snapped up by a predator? The shares have already dropped 9% since the start of the year.

  5. A(nother) sad day in the history of this once proud Scottish institution.

  6. Hopefully their customers will get advice to move away from a Zombie provider.

    Problem is that for some products there are no new providers coming forward.

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